General Consultation Period: 3/6/13 – 1/7/13
ICIS is implementing a process of rolling consultation on all of its pricing methodologies. Consultation paper GMC04/13 is part of this formal process and covers all of the ICIS primary price points included in the Propylene weekly publications.
The consultation asked both general questions about the suitability of the ICIS pricing methodology and questions addressing specific propylene market issues.
Propylene Methodology Consultation - Summary of responses
Following the recent announcement that ICIS would be launching a formal methodology consultation process, we have received a number of responses from key market players. To read the anonymised public responses please click on the links below.
ICIS received in total 13 responses.
This summary takes into account all responses, both confidential and public.
The clear majority responded that the current ICIS propylene methodology provides a reliable measure of market value.
Some respondents had suggestions about limiting participation in the Europe monthly contract price negotiations, while others were in agreement with the current process.
Two of the respondents wanted contributors to the reports to be bound by explicit guidelines for the behaviour of industry participants in giving information to ICIS.
A number of respondents asked whether ICIS could delay the release of certain contract information to the market.
One respondent felt that spot assessments should represent an average of deals done.
The majority of respondents wanted changes to the current Propylene Europe chemical grade spot assessments.
There was consensus that the Asia spot assessments should keep their all-week deals-based methodology.
ICIS Initial Decision
The responses do not provide sufficient feedback for ICIS to change its current methodology for deals-based reporting of propylene contract or spot markets in any of the geographical regions.
However, ICIS is sensitive to the various issues raised in connection with reporting the Europe monthly contract price, and will continue to consult with the industry about how this can be improved.
Industry suggestions to impose volume restrictions on the contract settlement process would rely on ICIS having full disclosure of contract partners’ current balances. ICIS will take further steps to gather this information with a view to implementing the proposed methodology changes. ICIS will deliver what the industry needs, provided that it delivers fair market value. The proposed changes will be ready for review by 1 October 2013 (GMC04/13).
ICIS will consult with the industry about the Propylene Europe chemical grade spot assessments with a view to finalising a proposal by 1 October 2013 (GMC04/13).
ICIS will not delay the reporting of initial Europe contract settlements, as this would be counter to our Editorial Standards which require us to promote transparency, and would disadvantage ICIS subscribers.
To provide further comments or feedback on the ICIS propylene methodology, please contact:
Barbara Ortner: Barbara.Ortner@icis.com
Nel Weddle: Nel.Weddle@icis.com